New to EDI? Here’s What You Need to Know

When you’re in charge of a business, it’s always important to reliably exchange documents with other organizations. There are a variety of ways to go about doing this. For example, as your business grows, you might start to hear about something called EDI. Perhaps one of your trading partners needs you to set up EDI in order to keep doing business with them.

If you’re new to EDI, incorporating this new technology might seem daunting. Perhaps you’ve never even heard of EDI. Even if you have, you might not know how to go about setting it up.

The good news is, you don’t have to do it on your own! By finding an EDI partner, you can ensure that you’ll have a knowledgeable and experienced team of people helping you get the most out of your EDI. In this article, we’ll first explain exactly what EDI is. We’ll then show some steps to take to find the right EDI partner.

What is EDI?

EDI stands for Electronic Data Interchange. It can be defined as the computer to computer exchange of documents between business partners. For example, if you’re the manager of a store, you need to send a purchase order document to your supplier to let them know which specific products you need. With EDI, the PO (EDI 850) is sent to you supplier automatically as soon as it’s created in your system. Also, it’s sent in a format your supplier can process directly into their own system, so you don’t have to rely on someone to read and enter it. EDI is quicker and more efficient than exchanging documents manually. Plus, there is less potential for human error. For a more thorough look at what EDI is, check out our video, “EDI Explained.”

To ensure businesses around the world can communicate using EDI, national and international organizations have developed EDI standards. In North America, EDI is done using the American National Standards Institute’s X12 Standard. Outside of North America, the most widely used EDI standard is EDIFACT, which was developed by the UN. Each of these EDI standards includes a list of specific transactions, ensuring that businesses can tailor EDI to their specific needs. To learn more about X12 and EDIFACT, check out our article explaining the differences between the two.

Finding the Right EDI Solution

Now that you know what EDI is, it’s time to consider how you’re going to set it up. You need to choose where your EDI software will be hosted. There are three options. First, you can host your EDI system in-house with a direct connection to your trading partners. Second, you can host your EDI system in-house but have a VAN (value added network) connection to your trading partners. Finally, you can have a third party host your EDI system. To learn more about the pros and cons of each of these options, check out are article about finding the right host for your EDI system.

If you’re looking to set up and maintain an EDI system, chances are you’ll need some help along the way. To ensure you have the assistance of someone who knows EDI software inside and out, you can find an EDI partner to work with your business. There are several questions to consider when searching for an EDI partner. These include which EDI systems and industries they have experience with, specific services they offer, and the strength of their customer service. For a closer look at what to consider when searching for an EDI partner, check out our article about the six questions you should ask.

Data Communication Solutions

If you’re looking for an EDI partner with a decades-long record of helping businesses succeed, look no further than Data Communication Solutions. Since 1991, our team of experienced and knowledgeable EDI specialists has been providing services such as development, managed services, and support for a variety of EDI systems and industries. Check out our list of clients to see the hundreds of companies we’ve worked with and consider reading some of our case studies to learn how we help organizations find the best EDI solutions. To learn more about how we can help your business, contact us today!